1. What is your understanding of CRM?
CRM is managing all aspects of a customer’s relationship with an organization to ensure the loyalty of customers which will increase the success of the business. It allows an organization to gain insight into a customers buying and selling behaviors which can be used in marketing applications or to support the organization offer a high level of service.
CRM can also be understood as a business strategy and business process which is enhanced by technology. With the use of CRM an organization can gain specific insight into a customers purchasing behavior and then design a specific marketing campaign to suit the customer, in turn encouraging increased customer spending. Harrah’s Entertainment Inc is a provider of branded casino entertainment through operating subsidiaries employs loyalty cards to follow every move made by the customer over the 28 properties. The loyalty cards are used to enhance the customer experience to ensure they return, this could be done through offering gifts for birthdays which are recognized by the loyalty card.
If an organisation realise and understand the needs of individual customers they are better placed to achieve a competitive advantage. Some if the distinct benefits of CRM are that it provides better customer service, improved caller efficiency, greater effectiveness of cross selling, simplifies marketing processes and contributes to gaining increased customer revenue. Once an organisation compiles the CRM information it can be used to create marketing campaigns and sales promotions by indentifying patterns.
There are three phases in the in the use of CRM, reporting, analysing and predicting. Reporting helps to identify customer across application, analysis helps to sort the customers into categories and predicting helps an organisation to predictions based on past customer behaviour.
2. Compare operational and analytical customer relationship management.
Operational customer relationship involves the support of transactional processing of everyday operations that deal directly with customer interaction. In comparison transactional relationship management is the support of the behind scenes operations and strategic analysis, this includes all the systems that don’t deal directly with the customer. The main difference between operation and analytical customer relationship management is the interaction with customers, operational CRM deals with customers whereas analytical doesn’t involve the interactions with customers.
The CRM technology used by marketing departments supports the organization in gathering and analyzing customer information to enhance their marketing campaign. By tracking a customer’s sales history an organization can design a specific marketing campaign to appeal them specifically. There is three primary CRM technologies an organization can implement, list generator, campaign management and cross selling and up selling. List generators compile customer information from a variety of sources and sort it for different marketing campaigns. Campaign Management systems guide users through marketing campaigns performing tasks such as campaign definition, planning scheduling segmentation and success analysis, Cross selling which offers marketing departments all kinds of information about a customer and their products which is used to identify cross selling and up selling campaigns.
The sales CRM involves the strategic use of the wealth information acquired by an organization. The Sales Force Automation is a system that automatically tracks all of the steps on the sales process and has a focus on increasing customer satisfaction, building customer relationships and improving product sales by tracking all sales information. The three primary CRM technologies a sales department can implement are sales management CRM systems, contact management CRM systems and opportunity management CRM systems. Sales management CRM systems automate each of the steps in the sales process helping individual sales representatives coordinate and organize all of their accounts. Contact management CRM system maintains customer information contact information identifies future customers for sales opportunities in the future. Opportunity management CRM systems target sales opportunities by finding new customers or companies for future sales.
4. How could a sales department use operational CRM technologies?
There are two main reasons for a sales department to require the use of operation CRM technologies. Sales representatives where struggling with the overwhelming amount of customer account information they were required and maintain and track and companies where struggling with the issue that much of their vital customer and sales information remained in the heads of their sales representatives. Operational CRM can assist sales representatives in organizing their accounts with features such as calendars, alarms, customizable multimedia presentations and document generation. Also help to maintain customer records and identify prospective customers, with the operational CRM a sales representative can have all customer information when answering a call to ensure that a customer feels valued. Also a sales department can employ CRM to gain insight into new customer and companies for future sales, as well defining selling efforts and budgets.
Three CRM technologies a customer service department can implement to increase customer satisfaction are contact centre, web based self-service and call scripting. A contact centre is where service representatives attend to customer enquiries and problems, this can potentially achieve a high level of customer support which is critical in gaining and keeping customers. Web-based, self-service system allows customers to find answers to enquiries and problems through the web. This feature allows customers to receive the support they require in their own time, which is efficient and maintain a sense of customer satisfaction. The use of call scripting employs organizational databases to track similar enquiries and automatically generate the details for the service representative who then relays this information to the customer.
5. Describe business intelligence and its value to businesses
Business intelligence refers to applications and technologies that are used to gather, provide access to and analyse data and information to support decision making efforts. It has a significant value to a business with the large amount of decisions being made daily. To improve the quality of business decisions, managers can provide existing staff with BI systems and tools that can assist them in making better, more informed decisions. Business intelligence ensures that the information being gained by an organisation is successfully used to gain profits and make successful decisions.
Shell Services International’s BI solution gave the company information about revenues for fuel and non fuel business. They were able to improve margin and turnover from BI by discovering that 20% of their products where delivering 80% of their sales. They were also able to negotiate better deals with suppliers and improve master file management, this helped reduce working capital.
Some benefits associated with BI is that it offers a single point of access to information for all users, which allows users with authorisation permission access information from databases, or a number of other sources. BI can be sued in every step of the value chain; every department within an organisation is able to benefit from BI. It can provide up-to-the-minute information, it gives users the tools to quickly and easily find immediate answers to their questions.
6. Explain the problem associated with business intelligence. Describe the solution to this business problem.
Business Intelligence is the solution to converting data into useful information. Business intelligence is the applications and technologies that are used to gather, provide access to and analyze data and information o support decision making. With business intelligence the wealth of data is being transformed into an understandable and meaningful context which can assist in making business decisions.
7. What are two possible outcomes a company could get from using data mining?
A company can increase sales through market basket analysis, which employs the information from website and checkout scanner to detect customer buying behaviour and predict future behaviour. This information can be used for cross selling and up selling marketing campaigns specific to a customer to increase their purchase.
Increased success in a marketing strategy, this can be achieved with cluster analysis. Cluster analysis segments customers into mutually exclusive groups. One such grouping could be grouping into postcodes, understanding demographics, lifestyle behaviours and buying patterns of the most profitable segments on the population to achieve success in a targeted marketing campaign.
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